Four U.S. companies will pay $26 billion to settle claims they fueled the opioid crisis
The companies, including Johnson & Johnson and McKesson, will admit no wrongdoing. Billions of dollars in payouts will fund drug treatment and harm reduction programs.
Four of the largest U.S. corporations have agreed to pay roughly $26 billion to settle a tsunami of lawsuits linked to claims that their business practices helped fuel the deadly opioid crisis.
Johnson & Johnson, the consumer products and health giant that manufactured generic opioid medications, will contribute $5 billion to the settlement.
The company announced in 2020 it would get out of the prescription opioid business in the U.S. altogether.
Three massive drug wholesalers — AmerisourceBergen, Cardinal Health and McKesson — will pay a combined $21 billion.
"This settlement represents real accountability," said North Carolina state Attorney General Josh Stein, who helped negotiate the deal.
Stein noted that most of the funds are earmarked for health care and drug treatment programs designed to ease the opioid crisis.
"There will be people alive next year because of the programs and services we will be able to fund because of these settlement proceeds," he said.
None of the companies acknowledged any wrongdoing for their role manufacturing and distributing large quantities of pain medications at a time when opioid addiction and overdoses were surging.
In a joint statement, the drug wholesalers said they had determined that enough governments had signed onto the deal to move forward with a "comprehensive agreement to settle the vast majority of the opioid lawsuits."
In all, 46 states and roughly 90% of eligible local governments have signed on to the deal, according to the companies' assessment.
In a separate statement, Johnson & Johnson said its contribution to the deal would "directly support state and local efforts to make meaningful progress in addressing the opioid crisis."
The deal settles thousands of lawsuits
This settlement resolves thousands of civil lawsuits filed against the companies beginning in 2014 by local and state governments as well as Native American tribes nationwide.
"The settlement will provide thousands of communities across the United States with up to approximately $19.5 billion over 18 years," the drug distributors said in their statement.
AmerisourceBergen will pay $6.1 billion, Cardinal Health will pay $6 billion and McKesson, $7.4 billion.
Broad outlines of the deal were first unveiled in July 2021 but the companies said they wouldn't accept the settlement unless enough governments agreed to sign on and drop their suits.
Initial payments will begin in April and will continue over the next two decades.
A dangerous moment in the opioid crisis
The money will arrive at a moment when the opioid epidemic has escalated dangerously.
Many Americans with opioid use disorder have shifted from taking prescription pain pills to street fentanyl, a synthetic opioid that is far more powerful and lethal.
Drug overdoses now kill more than 100,000 people in the U.S. every year, according to the Centers for Disease Control and Prevention.
Joe Rice, with the firm Motley Rice, is one of the lead attorneys suing the drug industry over its alleged role in the opioid crisis.
He supports this settlement and said the funds will help devastated communities "start rebuilding ... and deal with this epidemic."
Rice said the deal was structured in collaboration with local government officials to avoid a problem that arose with the $246 billion tobacco settlement of the 1990s.
Much of that money has been siphoned off for projects unrelated to the public health impacts of tobacco addiction.
Rice said he believes that won't happen this time. "Going into the opioid litigation, that was recognized as being a big problem that we had to fix," he said.
According to Stein, companies have also agreed to fund a new monitoring system to prevent communities from again being flooded with high-risk medications.
"If there are too many pills going into a community, an alarm will go off, a red flag will be issued, and distributors will be put on notice," Stein said.
"It will ensure that no more communities are awash in opioids as happened over the last couple of decades."
Lawsuits highlighted the actions of companies during the crisis
While companies acknowledge no wrongdoing in this deal, opioid lawsuits laid bare company practices that state attorneys general say were deeply troubling.
In some cases, drug wholesalers continued shipping vast quantities of pills to small rural communities despite red flags that drugs like OxyContin were being diverted and sold on the black market.
One email shared among executives at AmerisourceBergen — made public for the first time during a state trial last year in West Virginia — disparaged people addicted to opioids, describing them as "pillbillies" and referring to OxyContin as "hillbilly heroin."
With this $26 billion settlement now approved, negotiations continue over a separate opioid deal involving Purdue Pharma, maker of OxyContin, and members of the Sackler family who own the private company.
That deal, if finalized, is expected to include payouts topping $6 billion.
Meanwhile, opioid-related lawsuits continue in state and federal courts around the country focused largely on pharmacy chains that sold large quantities of opioid medications directly to consumers.
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